Divest from Tesla

Get Elon Musk’s money out of politics—for good.

There are three reasons why Musk’s involvement in politics represents the rare justification for individual investor divestment and for the original creation of an ex-Tesla S&P 500 exchange-traded fund. These reasons are Musk’s:

1. Unprecedented political spending; 
2. Direct government position while maintaining company control; and 
3. Explicit conflicts of interest affecting regulations. 

Two of Musk’s companies—Tesla and SpaceX—have lucrative and, at times, openly combative relations with the federal government, which grows ever more dependent on the services they provide, according to a New York Times analysis. 

Musk has long fought regulatory control and oversight of his government contracts. Now, after contributing $291 million personally and through political action committees to elect Donald Trump—making him the largest individual donor in the 2024 election cycle—Musk leads the Department of Government Efficiency (DOGE). 

As his companies continue to receive billions in government contracts, more investors and citizens question his two roles as regulator and beneficiary, and the fundamental tension and conflict of interest created, according to media reports.

Musk buys political influence. Because of the power Musk now wields from within the White House, the Trump administration ignores the conflicts of interest—yet Musk’s ambitions remain unquenched. 

• Musk-affiliated groups spent more than $17.5 million in the 2025 Wisconsin  Supreme Court race, making it the most expensive judicial race in history. 
• Musk paid $1 million to two voters in Wisconsin, and dangled smaller payments to others in exchange for supporting conservative candidates, signing petitions, and posting pictures of voters outside polling stations. 
• His investment backfired with many more voters motivated to reject his manipulations than accept his meddling: His candidate lost. 

Like Wisconsin voters, when everyday investors work in unison, they can also reject Musk’s power grab. Every dollar invested in Tesla strengthens the company’s stock price and indirectly enriches Musk, Tesla’s largest shareholder. Musk has leveraged his stock holdings to access vast sums of cash without selling shares or paying taxes, using a strategy common among billionaires: securities-based lending.

When we divest from Tesla, our individual actions have the potential to create a collective knock-on effect, reducing the value of Tesla stock. If this happens, Musk’s borrowing capacity is weakened and there’s less money to finance his causes and politicians.

Musk overstates DOGE progress, falls short of goals. Musk originally promised to cut $2 trillion from the $7 trillion federal budget. After he created DOGE, Musk lowered the goal to $1 trillion. At a Trump cabinet meeting April 10, Musk admitted that his efforts would fall 85% shy of his savings goal. But even this assertion that he’ll save $150 billion might be too high because of DOGE’s accounting omissions and math errors, the New York Times reported.

From the start, budget analysts have been skeptical that Musk could fulfill his claims, without severe cuts to popular programs like Medicare and Social Security. Now even Musk allies at the libertarian Cato Institute suspect DOGE’s impact might be fleeting. 

“Substantial, lasting deficit reduction will require reforms that have credibility: negotiated by elected representatives, executed accountably, and resilient against sudden administrative reversals,” wrote co-authors Romina Boccia, Cato’s director of budget and entitlement policy, and policy analyst Dominik Lett.

“Substantial, lasting deficit reduction will require reforms that have credibility… The same cannot be said for spending cuts by executive fiat, which can be developed by a few powerful people and unilaterally deployed in a non-transparent, chaotic manner, only to result in sudden policy whiplash.”

Romina Bocci and Dominik Lett, Cato Institute

“The same cannot be said for spending cuts by executive fiat, which can be developed by a few powerful people and unilaterally deployed in a non-transparent, chaotic manner, only to result in sudden policy whiplash.”

Musk regulates the regulators while enriching himself. Tesla and SpaceX received $30 billion in public dollars, according to a Forbes analysis, and account for at least $15.4 billion in government contracts over the past decade, according to The New York Times. As he takes public dollars, Musk battles federal regulators over such things as the safety of his automobiles, statements he’s made about company stock, contracts for satellites, threats to employees interested in unionizing, and licensing for rocket launches.

Since leading the agency, Musk has:

• Muscled in on a $2.4 billion federal contract for Starlink, the SpaceX subsidiary;
• Taken advantage of reductions at the U.S. National Highway Transportation Administration to disproportionately fire staff that regulates safety of self-driving cars, and
• Converted the White House lawn into a private car show.

There are federal rules to guard against conflicts of interest, and there are criminal laws to punish government employees and advisers when they personally benefit from their political influence, but this requires enforcement. Federal investigations are unlikely because of Musk’s close ties to Trump. 

With the reduction in regulatory pressure from within the government, external pressure can be applied through divestment. Liquidation can lead to devaluation, shrinking Musk’s shares and ability to continue converting wealth into political power.

Musk’s politics are a liability for Tesla shareholders. Musk’s polarizing personality and approach at DOGE has tainted the Tesla brand, driving away potential customers while undermining investor confidence. 

• Consumers have called for boycotts, protests, and vandalized private property. 
• Investors have questioned Musk’s commitment to Tesla as his attention is divided across multiple ventures that now includes DOGE. 
• Market analysts suspect that Tesla’s stock is significantly overvalued.

Musk’s company is suspected of being overvalued as it under-delivers. Tesla is considered both an automaker and a tech company, which helps explain why its stock is significantly higher than traditional automakers, which are now challenging the company’s dominance. Credit for its success is owed, in part, to federal loans, state and local subsidies, and electric vehicle tax credit. 

Tesla’s stock moves up and down more than twice as much as the overall market. This volatility increases the potential risk within investment portfolios. Musk repeatedly over-promises and under-delivers on innovations. And his politics hurt the brand and has forced market analysts like Wedbush Securities’ Dan Ives, traditionally bullish on Tesla, to slash its price target, according to the Los Angeles Times.

“Tesla has become a political symbol around the world and that’s not a good thing.”

Dan Ives, Wedbush Securities “Tesla Bull” market analyst

“The more Musk is attached to the Trump administration and DOGE, the brand damage goes from containable to permanent,” Ives said. “Tesla has become a political symbol around the world and that’s not a good thing.”

The Standard and Poor’s 500, or simply the S&P 500, is an index of the 500 leading U.S. companies. It’s attractive to many everyday investors because of its historical performance and broad market exposure. Investing in index funds—with their low fees and diversification—is a simple, efficient way for everyday investors to grow their retirement funds and college savings.

Tesla’s current weight in the S&P—which is continuously recalculated based on the number of shares available for trading—is approximately 1.64% as of March 24, 2025. This represents significant single-stock exposure for investors. 

Divestment is economic self-defense. A growing percentage of individual investors now invest through exchange-traded funds or ETFs, and the top three by asset size are S&P 500 ETFs. Exchange-traded funds have revolutionized investing by making markets more accessible to even more people. ETFs are:

• Accessible and cost-efficient: Exchange-traded funds democratize investing, giving everyone the same opportunities regardless of wealth.
• Dynamic and transparent: Unlike older investment vehicles like mutual funds, exchange-traded funds evolve with the market and provide clear visibility into holdings.
• Investor-driven: More investors have the opportunity to vote with their wallets, and “decide what’s good and what’s bad—that goes hand-in-hand with democratization.” —Anna Paglia, Executive Vice President of State Street Global Advisors (July 22, 2024)

We want the option of investing in an S&P 500 exchange-traded fund without exposure to Tesla and Musk’s unpredictability and politics. Currently, this product doesn’t exist, and, to our knowledge, an ETF that excludes just one company out of the S&P’s 500 has never been offered.

3 arguments against divestment and our rebuttals:

1. The economic cost of politically motivated divestment. Tesla is a leader in electric vehicles, energy storage, and other technologies—fields that will likely grow regardless of Musk’s political activities. Divestment by individual investors, particularly those saving for retirement and college, might face opportunity costs that disproportionately impact their investments while having minimal effect on Musk’s overall wealth and influence. Historical data shows that investment decisions driven by political or moral considerations rather than financial fundamentals often underperform. Critics might argue that there is insufficient demand for an ex-Tesla S&P 500 ETF.

Rebuttal: The proposed ETF that excludes Tesla would still capture ~98%% of the S&P 500’s market capitalization, minimizing any diversification loss while reducing exposure to Tesla’s specific risks. This isn’t sacrificing returns for moral purity—this is about recognizing that Musk’s political activities themselves represent a material financial risk to Tesla shareholders. In addition, exclusionary ETFs like fossil-fuel free funds were once niche and now manage billions in assets. Excluding just one company from the S&P 500 involves minimal tracking error and operational complexity.

Our campaign demonstrates demand for an ex-Tesla S&P 500 ETF.

2. Corporate governance vs. individual action. Rather than divesting completely, shareholders could engage in corporate activism. Corporate activism through proxy voting, shareholder resolutions, and board representation could work to counter Musk’s influence while shareholders maintain their financial stake and continuing to support the company’s potential benefits to society and investors. 

Rebuttal: Traditional corporate oversight and regulation have failed to constrain Musk. Tesla’s board has historically been dominated by Musk allies. Shareholder activism has similarly failed to produce meaningful changes in Musk’s behavior. Unlike most corporations where separation exists between the company and its CEO, Tesla’s brand and valuation are uniquely intertwined with Musk’s personal brand. This reality justifies treating Tesla differently than other corporations where governance mechanisms might be more effective.

Our campaign reveals the urgency for an ex-Tesla S&P 500 ETF.

3. Targeting Tesla vs. broader reforms. Focus on Musk and Tesla doesn’t address the systemic problem of wealth concentration and political influence. Critics might suggest that focusing on political elections or advocating for campaign finance reform, stronger conflict of interest laws, or improved corporate governance standards are more effective.

Rebuttal. This divestment campaign is one practical and immediate step investors can take to fight billionaire control of our lives. Our investment choices can help accelerate broader reforms by demonstrating public concern for these issues. If an ex-Tesla ETF gained popularity, it would create pressure on institutions to offer similar products, potentially starting a cascade effect. Even modest stock price impacts could affect Musk’s borrowing capacity, making his political spending more costly.

Our campaign accelerates the effort to break billionaire control.

Divestment is one of the levers we can use to get Musk’s money out of politics. As his conflicts of interest multiply and he continues to pour money into elections, there’s a real risk that his power is becoming stronger than our democratic state. We can’t afford to wait for politicians to act. Every dollar in an S&P 500 index fund that includes Tesla amplifies Musk’s borrowing power and political influence. 

Demand a better investment choice. Email and call Vanguard, Blackrock and State Street today and ask for the creation of an ex-Tesla S&P 500 exchange-traded fund. Divest. Fight Musk’s power grab with our votes and our investments.

Our government shouldn’t be Musk’s next corporate acquisition.

DIVEST FROM TESLA